PANAJI: Criticising the meagre returns on investments in loss-making corporations, the Comptroller and Auditor General of India (CAG) report for 2019-20 has recommended that the state should consider shutting down financially weak entities.
In its annual report, CAG said that while the state government invested Rs 640.7 crore over a five-year period in state-run corporations, the return on investment was a paltry 0.2% during 2015-20. The CAG criticised the state’s investment policies, and has said that the return on investments did nothing to offset the interest of 7% on borrowings.
“If the state government keeps on making investments in loss-making government companies, whose net worth is completely eroded, the chances of earning returns on such investments are remote,” said the CAG in its report.
Net worth of four SPSEs completely eroded due to accumulated losses
Similarly, experience has shown the inevitability of write-off of the loans given to loss-making corporations and other bodies such as sugar mills and financial corporations,” said the CAG in its report.
The CAG has asked the state government to take requisite steps to infuse transparency in the financial operations of the staterun corporations.
“Financial support to non-functioning SPSEs places additional financial strain on the government budget, which is already reporting revenue deficit and a high debt-GSDP ratio,” said CAG.
“The state government needs to expeditiously decide on the continuance or closure of non-functioning SPSEs,” said the CAG.
Goa meat complex, Goa State Horticulture Development Corporation, Goa State Infrastructure Development Corporation (GSIDC), EDC Limited, Kadamba Transport Corporation (KTC), Goa Tourism Development Corporation (GTDC), InfoTech Corporation of Goa, and Goa electronics limited (GEL) are among the 16 state-run companies in Goa.
Of the 16 state-run public sector enterprises (SPSE), two were non-operational.
“Five SPSEs registered accumulated losses of Rs 260.8 crore. Of the five companies, two SPSEs incurred losses of Rs 138.3 crore during 2019-20, while three SPSEs, though did not incur any loss in 2019-20, had accumulated losses of Rs 30.2 crore at the end of March 2020,” said the CAG report.
The net worth of four out of five SPSEs had been completely eroded by accumulated losses and stood at -Rs 88.8 crore against an equity investment of Rs 170.1 crore as on 31 March. Six out of nine corporations registered profits of Rs 39.4 crore during 2019-20, but the data showed that the profits earned by these six entities had decreased from Rs 40.6 crore in 2018-19 to Rs 39.4 crore in 2019-20.
